McDonald’s franchisee found guilty of tax irregularities of Rs 7.49 crore by GST NAA; here’s what happened

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Published: November 20, 2018 12:55:57 PM

The national Anti-profiteering Authority (NAA) has found Hardcastle Restaurants, a franchisee of fast food chain McDonald's, of not passing on goods and services tax (GST) rate cut benefits to customers.

CBIC, gst refund, more than 82000 crore rupee, traders, goods and services taxA notice has also been issued a show cause notice to Hardcastle Restaurants seeking its view on why penalty should not be imposed on it. (PTI)

The national Anti-profiteering Authority (NAA) has found Hardcastle Restaurants, a franchisee of fast food chain McDonald’s, of not passing on goods and services tax (GST) rate cut benefits to customers. The restaurant-chain which operates its business under brand name McDonald’s in Western and Southern India has been found guilty of not passing more than Rs 7.49 crore worth benefit despite a cut in the GST rate from 18 percent to 5 percent with effect from November 15, 2017.

The amount includes the extra GST which Hardcastle Restaurants “forced the customers to pay due to wrong increase in basic prices, otherwise the prices to be paid should have further got reduced by the amount of the GST illegally charged…,” the NAA said in its order.

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“He has further acted in conscious disregard of the obligation which was cast upon him by the law by issuing incorrect invoices in which the base prices were deliberately enhanced exactly equal to to the amount of reduced tax and benefit of ITC and thus he had denied the benefit of ITC and reduction in the rate of tax…to his customers,” it also said.

A notice has also been issued a show cause notice to Hardcastle Restaurants seeking its view on why penalty should not be imposed on it.

“Based on the above facts, it is clear that the respondent has not contravened the provisions of Section 171 (1) of the CGST Act, 2017 and hence there is no merit in the applications filed by the Applicant No 1 and the same are accordingly dismissed,” NAA said.

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